Posted by Lew Cash on December 23, 1998 at 14:19:53:
About 6 mo’s ago I made a $$$ offer (which was accepted)on a nice brick single family brick home which original asking price was $24k and the owner willing to part with for $18k. My whole attention was to locate another investor within 30 days and do a simultaneous closing and collect a few thousand dollars. The problem was that in that area no investor was willing to pay more than $10-$12k for the home so not having the cash myself I ended having to pull out of the deal and I forfeited my $500 earnest deposit.After all this time I find out that this property is still on the market. I have found out from the realtor that the owner is now willing to do a land-contract on the property. I have submitted an offer for $18k L/C with a 30/day lead before the first payment is due contingent on me finding a qualified tenant. If the deal is accepted I will then secure a tennat(i have a database full plus other sources of buyers) with a 3500/down create positive cash flow and then possible sell entire contract to a investor (for a reasonable fee of course) and insure that this is a win-win situation either way it goes. Does this seem like a good startegy (at least better than the first time i tried to acquire this property)? I appreciate the feedback. THIS IS A VERY EDUCATIONAL SITE.
I believe you should read your post, and then answer your own question. You state that investors would buy the property at $10-12,000, and then you immediately wonder if by doing a Land Contract for $18,000, if you could make any money?
First I have a question which doesn’t make much of a difference, but what are the comps in that area? Are they $15K or $30K?
Frankly, I believe no matter how you slice this deal, it comes up peanuts…at least that’s what you’ll end up making on it. I would place my $500 elsewhere.